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DoCUMKNr 

No. 405 



CERTAIN POLICIES OF THE 
PRESENT ADMINISTRATION AND THEIR EFFECTS 



AN ADDRESS 



DELIVERED 

BEFORE THE BOSTON CITY CLUB. BOSTON, MASS.. ON 

APRIL 13. 1916. IN RELATION TO CERTAIN POLICIES 

OF THE PRESENT ADMINISTRATION 

AND THEIR EFFECTS 



BY 



HON. REED §MOOT 

United States Senator from Utah 




PRESENTED BY MR. LODGE 

April 14 ( calendar day, April 15 ), 1916.— Ordered to be printed 



WASHINGTON 

GOVERNMENT PRINTING OFFICE 

1916 



3^*^; 



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.fe^ 



D. of D. 
MAY 3 1916 






CERTAIN POLICIES OF THE PRESENT ADMINISTRATION AND 

THEIR EFFECTS. 



Mr. Chairman and Members of the Boston City Club: The 
theory that a man is lacking patriotism because he has affiliations 
with a political party and that his opinions are shaped by his partj^ 
alliance rather than guided by consideration of the best interests of 
the country is held by many people but will not bear the test of 
analysis. Men do not form their opinions according to their political 
affiliations but form their political affiliations according to their 
opinions. 

Undoubtedly a few men form their political affiliations because of 
the party connections of their forefathers or because of the particu- 
lar section of the country in which they live and then adopt the 
political opinions of that particular party without having carefully 
judged the merits of the party's principles. But that is true only in 
exceptional cases, and it is the general rule that men judge first of 
the merits of principles and make their partj^ affiliations according 
to their best judgment of what will promote the welfare of the 
country. 

It is expected that this discussion will be partisan in its character. 
It is expected that the policies and principles of the Republican 
Party will be commended and the policies and record of the Demo- 
cratic Party will be criticized. Some perhaps will attribute this 
attitude to purely partisan feeling and prejudice, but I trust that 
most of you will be considerate enough to believe that I am not 
making a partisan Republican speech merely because I am a Re- 
publican, but that I am a Republican because my study of govern- 
mental problems and political history has thoroughly convinced me 
that the adoption and maintenance of Republican principles in the 
administration of our Government will subserve the interests of the 
American people. If I were of the opinion that the principles and 
policies of the Democratic Party were superior, I should not hesitate 
to change my affiliations. I trust that my hearers will be generous 
enough to assume therefore that in what I have to say in adverse 
criticism of Democratic practices and accomplishments there is no 
feeling of partisan antagonism, no disposition to question the patriot- 
ism or personal integrity of Democrats, but an effort to show that, 
however honest and patriotic members of the Democratic Party maj^^ 
be, they have erred in the formulation of their principles and have 
proven themselves incapable in the administration of governmental 
affairs. 

INEFFICIENCy OF INEXPERIENCE. 

The assertion that Democrats are incapable in the administration 
of government is occasionally confirmed by Democrats themselves 
who realize that either because of its inexperience in government or 
because of the erroneous theories it maintains, the Democratic Party 

3 



4 POLICIES OF PRESENT ADMINISTRATION. 

is not successful in conducting Government business, either legis- 
lative or executive. In recent months we have had this admission 
by such eminent Democrats as Newton D. Baker, recently appointed 
Secretary of War; Hon. Francis G. Newlands, United States Sena- 
tor from Nevada ; and Hon. John Sharp Williams, United States 
Senator from Mississippi. 

It is well known to all of you that the Democratic Party has been 
in control of the affairs of the United States but twice in 50 years. 
Members of that party, therefore, have not had the responsibility of 
shaping the constructive policies of the Nation. Quite easily they 
have drifted into the attitude of being opponents of Eepublican 
policies and affairs, rather than proponents of policies of their own. 
They have been against the Republican administrative endeavors, 
rather than builders of constructive policies of their own. Their 
habits of thought, therefore, have been such that it is not easy for 
them, when vested with power and responsibility; to take up the 
large and exacting undertaking of working out the details of legis- 
lation or solving the intricate problems of executive administration. 

To say that this is true is not an unkind reflection upon individual 
members of the Democratic Party. You. as business men, realize 
this in your private business. A manufacturer of slioes, for ex- 
ample, who has in the employ of his establishment a thousand men 
working in various departments, from the most ordinary common 
labor to the difficult task of selling the goods, would not for one 
moment consider placing in supervision of his establishment a force 
of men who had been for IC) years without practical experience in 
that special line of work. 

I do not say that circumstances could not exist which would make 
such a change advisable. If the owner of a factory found the ex- 
perienced managers of his establishment conducting the same at a 
great loss, ruining his property, and destroying his business, it 
Avould undoubtedly be wise for him to change even if he had to place 
his affairs in the hands of men of no experience whatever in that 
pai'ticular line of work. 

If it were true that the affairs of this Government were in a de- 
plorable condition under Republican administration, and that our 
economic policies were disastrous to our industrial welfare, and if 
we had lost our standing among the nations of the earth, I, for one, 
would not complain if the control of governmental interests were 
turned over to a political party without experience in government. 
But I think you Avill agree with me that no such condition existed at 
the time of the change of administration. While some of you un- 
doubtedly believed the policies of the Republican Party were not 
exactly what they should have been, and while I shall admit that 
the Republican Party has not been perfect in either its legislation or 
its administration, yet I assert that its failures were comparatively 
inconsequential in character, and that it was, in fact, successful in 
a large degree when its record is compared with that made by its in- 
experienced successor. 

Under the economic policies which the Republican Party main- 
tained this country was thriving industrially. The business of the 
Government in the various departments was promptly, efficiently, 
and economically conducted. The United States enjoyed a high 
place in the estimation of other nations. The minor defects and 



POLICIES OF PEESENT ADMINISTRATION. 5 

faults were such as might be expected under any human administra- 
tion, and were not such as to justify turning the management of our 
affairs over to men Avhose economic principles were wrong and 
whose experience made it practically impossible for them to conduct 
the business of the Government satisfactorily or economically. 

Taking up what, I believe, each of you will acknowledge to be the 
most important question relating to governmental affairs, I shall 
undertake to demonstrate the superiority of Hepublican policies rela- 
tive to the principle of protection and methods of raising revenue for 
carrying on the people's business. 

A wise political philosopher has said that the real test of effi- 
ciency in government is to be found in the manner in which an ad- 
ministration conducts the finances of the nation. 

If Mr. Wilson and his associates on the 4th of March, 1913, had 
for a minute desisted from their forward look and had glanced 
back over the preceding 16 j^ears, they would have found that their 
predecessors in government had so provided for the Nation's revenue 
that they had put into the Federal Treasuiy the imperial sum of 
$9,677,952,080, an average, of $49,886,351 per month. From these 
moneys Mr. Wilson's predecessors had provided the means to carry 
on the Spanish War, to add consistently year by year to our naval 
strength, to embark in costly expenditures in the Philippines, to 
create a new Naval Academy at Annapolis, and to build those splen- 
did structures which house the cadets at West Point ; to add in every 
State to the number of buildings which serve our public purpose; 
to begin and to carry well forward to completion a comprehensive 
and costly plan for the development of the National Capital; to 
spend large sums for the development of our coast and lake harbors, 
and for the development of our internal commerce-carrying water- 
ways; to build the Department of Agriculture from an insignificant 
bureau to one of the greatest of our executive departments ; to create 
and develop two more ministerial departments in the President's 
Cabinet; to initiate and fulfill thousands of helpful projects; and, 
most of all, to plan and construct the Panama Canal, the greatest 
piece of modern engineering and construction which either continent 
can boast. And having accomplished all this, to hand over to theii- 
successors a Treasury containing a surplus of $149,335,711.78. 

In making this record Mr. Wilson's predecessors put into the 
Treasurj^, as I have said, nearly $10,000,000,000 at an average of 
$49,886,351 per month ; and in spite of all these colossal expenditures 
without undue pressure upon the sources of revenue and maintaining 
the producing capacity of the Nation at its full height, they took 
from the Treasury almost $2,000,000 less per month than they put 
into it. Mr. Wilson and his associates have changed all this. Re- 
versing the fiscal policy which had produced these splendid results 
in the Treasurj^, and the fruits of which are to be seen in a tangible 
manner, as I have indicated, they turned to a policy which it must 
be admitted brought money to the Federal coffers, but which was 
accompanied bj^ a policy of extravagance resulting to-day in an im- 
poAxrished Treasury. By perverse and inquisitorial personal taxa- 
tion they have put $11,000,000 more per month into the Federal 
Treasury than their predecessors did, but by the reckless profusion 
of their appropriations they have at the same time taken nearly 
$13,000,000 a month more from the Treasury than their predecessors 



6 POLICIES OF PRESENT ADMINISTEATION. 

(lid. Ill other words, if Mr: Wilson on the 4th of March, 1913, coiild 
have looked both forward and backAvard, he would have seen his 
predecessors adding $2,000,000 a month to the Treasury surplus and 
himself adding an equal sum to the Treasury deficit. 

Moreover the Eepublican revenue laws, which produced these re- 
sults, were so drawn that $22,967,653 per month were customhouse 
receipts and were paid by foreigners, while $22,534,842 per month 
came from internal-revenue receipts, which were paid by our own 
peojDle. Under the Democratic system only $19,023,760 per month 
was taken from the foreigner in customhouse receipts, while the 
enormous sum of $34,116,302 per month was wrung from our own 
people by vexatious and oppressive taxes upon incomes, vocations, 
enterprise, and thrift. Those American citizens who have recently 
been wrestling with the clumsy and confusing income-tax blanks, or 
who have been constantly licking stamps for telegraph and telephone 
messages, and for other necessary business transactions, will be in- 
terested to know that, under Democratic revenue legislation, our 
own people contribute $1.79 to the National Treasury for every dol- 
lar the foreigner pays, whereas under Republican revenue laws, the 
foreigner paid $1.02 as against each dollar contributed by American 
citizens. 

Believing that the tariff is the greatest economic issue now before 
the American people, I shall devote — Avhat some of you may think — a 
very liberal amount of time to the presentation of figures which tell, 
in a very convincing way, the story of Protection's success and of 
Free Trade's failure. 



EFFECT OF UXDKRWOOD LAW ON IMPORTS. 

The fairest basis of comparison for the purpose of showing the 
effects of the Underwood tariff law on our trade is the lO-inonth 
period from October, 1913, Avlien that law became effective, to Julj' 
31, 1914, when the European war was declared, compared Avitli Octo- 
ber, 1912, to July, 1913. under the Republican tariff law, and October, 
1914, to July, 1915, a full war period. 

For the 10 months ended July, 1913. our total foreiiin trade was 
$3,614,293,642, of which $2,110,466,639 Avas exports and $1,503,827,003 
was imports, yielding us a favorable trade balance of $606,639,636. 
For the 10 months ended July, 1914 (Underwood law), our total 
foreign trade was $3,557,383,078, of which $1,951,578,296 was ex- 
ports and $1,605,804,782 was imports, or a favorable balance of trade 
of but $345,773,514. Here is a loss of. 7.6 per cent in exports or 
sales abroad, a gain of about 7 per cent in imports or products com- 
peting with American goods, and a loss of 43 per cent in our favor- 
able trade balance, which theoretical economists treat lightly, hut 
which the business man knows full well makes money easy and en- 
ables him to finance his operations at smaller interest charges. For 
the 10 numths ended July. 1915 (full war period), our total trade 
rose to $4,005,957,321, of which $2,617,698,636 was exports and 
$1,388,258,685 was imports, or a favorable balance of trade due to 
the war of $1,229,439,951, the high record in the history of our for- 
eign commerce. 



POLICIES OF PRESENT ADMINISTEATION. 7 

A FEW MASSACHUSETTS INDUSTRIES. 

It will be of interest to the people of Massachusetts to know how 
some of their chief industries fared under the Democratic tariff law, 
using these same 10-month periods for comparisons. 

Notwithstanding the fact that foreign competitors had little 
opportunity in the limited time during which the Democratic law 
was in free operation to perfect plans looking to increasing their sales 
of boots and shoes in the American market, our imports of footwear 
increased 70 per cent. There was an increase in imports under the 
entire leather schedule of nearly 55 per cent, or from $14,166,838 to 
$21,830,850. For the 10 months of 1914-15 these imports dropped to 
$15,436,501. 

Cotton cloth increased from 36,735,303 square yards, with an im- 
port value of $6,712,274 in 1912-13, to 56,713,780 square yards valued 
at $10,896,575 in 1913-14. It will be observed that the reduction of 
the tariff on cotton cloths did not work a reduction on the import 
price, inasmuch as the average price of 1912-13 was 18.2 cents per 
yard, while 1913-14 it was 19.2 cents. The number of j^ards im- 
ported for 1914-15 Avas slightly in excess of that for 1912-13. The 
total manufactures of cotton imported were valued at $53,380,350, 
$60,287,132, and $35,829,441, for the three periods, respectively. 

Cutlery imports advanced from $1,596,319 in 1912-13 to $2,594,511 
in 1913-14, an increase of 62 per cent, dropping to $1,505,499 in 
1914-15, nearly all of it coming from Great Britain. 

The fish schedule recorded an increase of 23 per cent, or from 
$12,812,354 for 1912-13 to $15,873,838 in 1913-14. The total for 
1914-15 was $14,648,439. 

In this connection Mr. Fred L. Davis, president of the Gloucester 
Board of Trade, makes the following statement : 

Because fish are now being received free of duty from Nova Scotia and New- 
foundland, wliere lower wages and lower operating expenses permit a sale at 
less than the American fisl man can afford to take, the Canadian has taken 
a considerable portion of our market from the American fishermen without the 
American consumer buying his fish at even a fraction of a cent less cost. 

Manufactures of wool rose from $8,870,101 in 1912-13 to 
$29,239,274 in 1913-14, or an increase of 231 per cent. In 1914-15 
they amounted to $11,240,251. The largest increases under this 
schedule were recorded by cloths, dress goods, and wearing apparel. 

Manufactures of silk increased 22 per cent, or from $22,473,237 
in 1912-13 to $27,445,039 in 1913-14. They were $19,768,243 for 
1914-15. 

Print paper increased 72 per cent in 1913-14 and 94 per cent in 
1914-15, the imports being $5,707,077 for 1912-13, and $9,807,334 and 
$11,085,801, respectively, for the two 10-month periods following. 
Of course the bulk of this came from Canada. The total paper 
schedule registered imports of $18,277,029. $23,890,468, and 
$20,759,638, for the three periods, respectivel}^ 

Manufactures of vegetable fibers, jute, linen, hemp, etc., increased 
from $65,199,001 in 1912-13 to $70,060,253 in 1913-14, or over 7 i)er 
cent. They amounted to $48,356,431 in 1914-15. The largest increase 
was in burlaps and bagging. 

So much for manufactures, fish, etc. But while the manufacturing 
industries of Massachusetts suffered from the competition engendered 



8 POLICIES OF PRESENT ADMINISTEATION. 

by the low duties of the Deinocratic tariff law, the agricultural in- 
dustries encountered a competition no less pronounced. I will g'we 
some examples: 

Imports of meat and dairy products increased from $12,460,501 in 
1912-13 to $40,545,512 in 1913-14, and dropped to $30,421,210 in 
1914-15. 

Wool increased from $13,997,460 to $38,118,561 and to $54,240,425 
for the three periods, respectively. 

Cattle, hogs, sheep, fowls, etc., increased from $8,649,917 to 
$22,943,695, dropping to $17,981,670 for 1914-15. 

Agricultural products — breadstuffs (including grains, oats, etc.). 
vegetables, hay, seeds, broom corn, plants, shrubs, etc. — increased 
from $37,436,473 in 1912-13 to $71,924,646 in 1913-14. They were 
$45,918,050 in 1914-15. 

Eggs increased from about $150,000 in 1912-13 to $1,089,941 in 
1913-14. dropping to $376,504 in 1914-15. 

In short, the total increase of importations into this country of 
the manufiitf-turing and farm commodities winch I have enumerated, 
and in the production of which Massachusetts is vitallv concerned, 
increased from $269,469,580 in the 10 months of " 1912-13 to 
$425,843,720 in 1913-14, an increase of 58 per cent, while for the 10 
months of 1914-15, despite all the demoralizations of commerce inci- 
dent to the European struggle, these commodities still entered our 
market to the amount of $316,482,302, or an increase of nearly 18 
per cent over tlie 1912-13 period. 

REVENUES FROM CUSTOMS. 

A discussion of imports naturally leads to a discussion of the reve'- 
nue derived therefrom, and in this, as in all other things, the Under- 
Avoocl tariff laAv has proved a lamentable failure. In defending his 
law Senator (formerly Representative) Underwood said on the floor 
of the Senate December 17 last : 

The receipts at the customhouse tor 1912 amounted to $311,321,672. lu 1913, 
the last year of the Payne law, the customs receipts amounted to $318,891,395, 
and in 1914, the first year of the present law, the receipts at the customhouse 
amounted to $292,128,527. In other words, the falling off of receipts at the 
customhouse, comparing 1914, the first year of the present law, with 1912, was 
only $19,193,045, and comparing it with 1913, the last year of the Payne law, 
it was $26,762,868. You can not dispute the facts. 

If Senator Underwood would confine his figures to the facts, there 
would be no reason to dispute his statement; but he, in common with 
other partisans of his bill, persists in crediting to that measure during 
the first year of its operations the revenues derived from the Repub- 
lican law during Jidy, August, and September. This lias been con- 
fusing to the casual reader, and intentionally so. 

The Democratic laAv became effective October 4, 1913, and thus was 
in operation but nine months of the fiscal vear 1914. During the 
period July 1 to October 3, 1913, $92,189,883 of customs revenues 
were collected under the Republican law, which made a part of the 
$292,000,000 mentioned by Mr. Underwood— 30 per cent in fact. In 
addition to this, about $20,000,000 was realized from the Republican 
rates on wool, woolen goods, and sugar, which were carried over foi- 
a few months in the Democratic law. This would leave just about 



POLICIES OF PRESENT ADMINISTEATIOJST. 9 

$180,000,000 to be credited to the Democratic law during the first 
nine months of its operation, or a monthly average of $20,000,000 
compared with a monthly average under the Republican law for 
1913 of $26,500,000 — an average loss bv the Democratic law of 
$6,500,000 monthly, or a yearly loss at the rate of $78,000,000. And 
these figures are exceedingly conservative. 

Had the Underwood tariff laAv been in effect during tlie first three 
months of the fiscal 3^ear 1914, it would have netted not more than 
$60,000,000 for the Treasury, instead of the $92,000,000 actually col- 
lected by the Eepublican rates, so it is entirely fair to state that the 
actual benefit derived by the Democratic law from the law which it 
superseded was about $32,000,000 for this three months period, plus 
the $20,000,000 from rates carried over, or $52,000,000. We might 
also add to this sum $3,800,000 from a Republican postal surplus, 
smuggled into the Treasury by Mr. Burleson under the head of mis- 
cellaneous receipts, June 29, 1914, or a total from Republican customs 
rates and administrative efficiency of nearly $56,000,000 for the fiscal 
year 1914. 

The total ordinar}' receipts for the fiscal year 1914 reported by 
Secretary McAdoo were $734,343,700. Without the aid of Republi- 
can laws the Democratic measures would have produced perhaps 
$678,543,700. The total disbursements reported were $735,495,316,, 
Panama Canal disbursements of $34,800,000 included. To this should 
be added the general deficiency bill, Avhich Avas filibustered over until 
July foUoAving the close of the fiscal year, $5,900,000, making total 
disbursements for the fiscal year 1914 of $741,395,316. It is quite 
clear, therefore, that the UnderAvood tariff rates in the first nine 
months of their operation Avould have caused a deficit in the Treas- 
ury measured by the difference betAveen $741,400,000 and $678,500,000^ 
or nearly $63,000,000, or, excluding Panama Canal disbursements, 
of $29,000,000, had it not been carried out on the crutches of the 
law AAdiich is superseded. This is a fact incontroA^ertible. 

It is difficult, if not Avell-nigii impossible, to measure AA'ith any 
degree of accuracy the effect of the war on our total receipts for 
the fiscal year 1915. If auA^thing, the war aided the Treasury, 
because, wliile the total receipts from customs AA'ere but about 
$10,000,000 less than estimated in the Secretar^^'s report, the receipts 
from corporation and indiAddual income taxes Avere augumented be- 
cause of corporation and individual AAar profits. Bv collecting 
$52,000,000 from the Avar revenue measure, and about' $80,000,000 
from income taxes, the Treasury staggered through the year Avith a 
total excess of disbursements over receipts of $57,442,509. Had the 
Republican tariff law been in effect during this year, and a policy 
of economy adopted instead of one of Avild extravagance, the war 
rcA'enue act Avould not have been necessary and aa^c Avould haA^e closed 
the year Avith a fair surplus. 

The outlook for adequate revenues AA^as so discouraging at the 
opening of the fiscal year 11)15 that AA'hen the Avar broke out the 
Democrats promptly seized upon it as a pretext to enact the so-called 
AA'ar revenue bill, which saddled the people Avith millions of dollars 
of A'exatious internal taxes. The opposition claimed that the pros- 
pect of a huge reduction in imports justified such additional taxa- 
tion. The tax Avas collectible for the calendar year. 
S. Doc. 405, 64-1 2 



10 POLICIES OF PRESENT ADMINISTEATION. 

In a measure the war did curtail imports during the first few 
months, and it has since jjerformed the proxy to some extent of a 
protective tariff on manufactured goods. The mills of Massachu- 
setts owe it to the war that they are running to-day. But the situa- 
tion is not all that our opponents would have us believe. 

During the calendar year 1912, under Republican law", on $1,818,- 
000,000 of imports we realized $326,340,000 of customs revenue, or 
an average rate of duty on all imports of 18 per cent. During 1913, 
nine months under the Republican and three months under the 
Democratic law, on $1,792,600,000 of imports we realized customs 
revenue in the sum of $310,800,000, or an average rate of duty of 
17.4 per cent. For 1914, five months of war, our imports totaled 
$1,789,250,000; duty collected, $241,250,000; average duty rate, 13.5 
per cent. While for 1915, full war period, our imports amounted to 
$1,778,600,000; duty collected, $198,606,000; average duty rate, 11.1 
per cent. 

These figures indicate that while imports fell off slightly over 2 
per cent, comparing 1915 with 1912, duties fell off 39 per cent, and, 
•compared with 1913, imports fell off about eight-tenths of 1 per cent 
while duties fell off 36 per cent. 

In this respect things are going from bad to worse. During the 
month of January last we imported goods to the value of over $184,- 
000,000, but the "duty collected thereon was only $15,544,000, or an 
average duty rate for the month as low as 8.4 per cent. January, 
1916, sets the high-water mark thus far in our import trade during 
the histor}^ of the country, and the low-water mark for the average 
rate of duty. Seventy-four per cent of our imports for this month 
came in absolutely free. 

THE TREASURY BALANCE. 

I desire at this point to discuss for a moment a subject which has 
given rise to considerable debate recently through the medium of the 
press, namely, the balance in the general fund of the Treasur3^ 

The fiscal year ended June 30, 1913, thanks to the efficacy of 
Republican laws, found us with a balance in the general fund, ex- 
clusive of silver bullion, subsidiary silver coin, etc., of $141,150,282, 
according to the Secretary's report. On June 30, 1915, excluding 
these same items, this balance had sunk to $48,522,020, according to 
the daily Treasury statement for that date, although the report of 
the Secretary of the Treasury for the fiscal j^ear 1915, submitted 
in December following, increased this balance to over $104,000,000. 
This balance continued to dwindle until September 30 of that year, 
when the daily Treasury statement reported it as $40,898,895, or, 
excluding these unavailable assets, $8,018,179. In tkv meantime our 
adroit Secretary of the Treasury, Mr. McAdoo, had been rehearsing 
a balancing feat quite different from any theretofore exhibited to the 
public, and what was the astonishment of those who scan the daily 
statement each morning on awaking to find that the net balance for 
October 1, 1915, had swollen to $128,063,545, an increase of $87,000,000 
over night, or $120,000,000 over the September 30 balance, minus 
silver bullion and subsidiary coin. The chief items included in this 
inflated balance were $61,000,000 to the credit of disbursing officers 
and $23,000,000 of the national-bank notes redemption fund. Since 



POLICIES OF PRESENT ADMINISTRATION. 11 

October 1, 1915, this new and ingenious system of accounting has 
been followed. It is supposed to lull into a feeling of security those 
AA'ho study the Federal finances. 

We of the United States naturally accept Boston as our authority 
for English definitions, and a Bostonian has correctly defined the 
term " net balance." I refer to Mr. Harvey S. Chase, certified public 
accountant and former commissioner on economy and efficiency of the 
National Government. Mr. Chase declares: 

A " net balance " necessarils' means a free balance after all obligations have 
been provided for * * * a " net balance " can contain only funds free and 
on top of all current obligations. 

Applying Mr. Chase's definition to the McAdoo system of account- 
ing, let us see what was the true state of the " net balance " on Febru- 
ary 29, 1916. Owing to the fact that certain items included in this 
computation do not appear until 15 daj^s following the close of the 
month preceding, the February figures are the latest available. 

On Feb. 29, 1916, Secretary McAdoo reported a net balance 

in the Treasury of $117, 170, 215. 25 

On that date there were outstanding obliga- 
tions and unavailable assets as follows : 

(1) Balance to credit of disbursing offi- 

cers (representing outstanding 
valid claims against the Govern- 
ment) .$.56,065.33.5.98 

(2) National-bank notes redemption fund 

(payable from the general cash) 39,9.33,755.50 

(8) Limited tender or unavailable assets 
(subsidiary silver coin, fractional 
currency, minor coin, silver bul- 
lion) 28, 332, 199. 74 

(4) Deposits in Philippine treasui'y 

(always before Oct. 1, 1915, consid- 
ered unavailable) 2, 585, 323. .59 

(5) Treasury warrants outstanding 1,583.202.98 

(6) Matured coupons '610.146.-59 

(.7) Interest checks 373,922.34 

Total amount of deductions 129, 483. 886. 72 

Deficiency 12, 313, 671. 47 

Net excess of receipts over payments in February reports sub- 
sequently received 2, 171, 612. 63 

Actual deficiency month of February, 1916 10, 142, 0.58. 94 

In other words, if the Government were suddenly called upon to 
meet some unforeseen obligation from its balance, it would be in no 
position to do so. 

" WAR ORDER " PROSPERITY. 

The administration has endeavored in every way to minimize the 
influence of the European wa's.in creating such prosperity as we now 
enjoy. One year ago Secretary Redfield, in an address to the United 
States Chamber of Commerce, categorically denied that our huge ex- 
port trade consisted chiefly of Avar orders. The influence of war on 
our export trade began to be felt in September, 1914, when large sup- 

1 Reported in Financial Statement of the United States Government for Feb. 29, 1916, 
appearing Mar. 15. 



12 POLICIES OF PEESENT ADMINISTEATION. 

lilies of foodstuffs, horses, mules, automobiles, etc., commenced to go 
forward. Our total domestic exports for the 12 months, September, 
1912, to August, 1913, inclusive, amounted to $2,460,000,000. From 
September, 1913. to August, 1914, they dropped to $2,245,000,000, or 
a decrease for the 12 months at the rate of nearly $18,000,000 
monthly. From September, 1914, to August, 1915, a full war j)eriod, 
we exported domestic goods to the vahie of $2,978,800,000. Of 31 
commodities included in these exports, which may properly be cata- 
logued under munitions of war, our exports during the 1912-13 
peace period amounted to $600,000,000; during the 1913-14 period, 
before war orders began to come in. to $505,000,000; and during 
the 1914-15 war period to $1,515,500,000, or a gain in excess of 
$1,010,000,000 over the previous year on these 31 commodities alone. 

FEEDIKG THE EUROPEAN ARMIES. 

We exported $240,000,000 worth of breadsluffs and oats during 
the 1912-13 period; thev dropped to $181,000,000 in 1913-14; and 
reached the m-iprecedent"ed record of $568,000,000 in 1914-15. Ex- 
ports of meat and dairy products fell from $156,000,000 in 1912-13 
to $138,000,000 in 1913-14, and rose to $243,000,000 in 1914-15. It 
was but a few days ago that the British Government laid contracts 
in this country for $71,000,000 for beef stew to be supplied to her 
armies. 

The average export price of corn per bushel for the eight months 
ended August, 1913, was 57.0 cents. The war forced it to 81.4 cents 
for the eight months ended August, 1915. Oats jumped from 39.4 
cents to 61.0 cents, wheat from 97 cents to $1.47. flour from $4.67 to 
$6.48 per barrel. The farmers of the country may get some idea 
from these figures of the benefit derived by them in feeding the armies 
of Europe. 

NEW INDUSTRIES STARTED. 

The influence of the European war in the encouragement of new 
industries has been no less pronounced. During the 10 months of 
1915 ended October, 40 new companies capitalized at $100,000 or 
over were organized in the Eastern States alone for the manufacture 
of war munitions, the aggregate capital being $54,000,000, and this 
did not include the refinancing of four large concerns already estab- 
lished to the amount of $354,000,000. Indirectly, as rt^sult of the war, 
58 new companies with a capital of $100,000 or over were organized 
in the Eastern States for the manufacture and distribution of chemi- 
cals, drugs, and dyes, total capital aggregating nearly $54,000,000. 
Large investments of capital have also been made in the South and 
in the Mississippi Valley through this same cause. 

EXPORT TRADE WITH NEITRALS. 

But while our exports to belligerent Europe have increased to an 
enormous extent, our exports to neutral countries, not inchuling Nor- 
wa}^ Sweden, and the Netherlands, the gateways to Germany, have 
fallen away coincidently with an increase of imports. 



POLICIES OF PRESENT ADMINISTRATION. 13 

I have statistics for the 12-moiith periods ended September, 1913, 
under the Republican law, and 1914 and 1915, under the Democratic 
law. They show that in the so-called " peace zones " of trade — North 
America, South America, Asia, Oceania, and Africa — our exports 
amounted to $985,125,091, $839,608,429, and $807,695,414 for these 
three periods, respectively, while our imports from the " peace zone " 
reached the totals of $921,110,289, $1,028,954,620, and $1,126,866,298, 
respectively, for the three periods. During the 12 months ended 
September, 1913, we chalked up a favorable balance in our trade 
with the '' peace zone " of $64,014,802. In 1914 the balance was $189,- 
346,191 against us, and in 1915 it rose to $259,170,884 against us. 

What a political blessing the European war has been to the Demo- 
cratic Party. Before the war that party had demonstrated its 
inability and unfitness for the task of maintaining prosperity and 
providing adequate revenue to meet the extravagant appropriations 
made by it for the ordinary running expenses of the Government. 
In this connection we must not forget that the balance of trade 
against the United States during the four months preceding the war, 
at a time when the Democratic policies and tariff law were in full 
force, was $248,000,000, clearly indicating that the campaign of our 
foreign competitors to oust us from our home market was becoming 
effective. A couple more of such four-month periods and conditions 
as obtained in 1894 to 1897 under the Wilson tariff law would have 
been repeated, only in a magnified form; and, at the same time, the 
Government revenues were failing to meet Government expenses by 
approximately $1,000,00 per day. Eliminate the market created by 
a temporary, artificial European demand and American industry 
would be prostrated, unless the fiscal policy of the present adminis- 
tration is changed. 

The American manufacturer no doubt thinks he has had fierce 
competition with foreign manufacturers in the past, but I can assure 
him that his past experience compared with the future will be as a 
gentle zephyr compared to a cyclone. It is evident on all sides that 
a world-wide commercial war has begun. Former commercial rela- 
tions of the great powers of the world are already destroyed by the 
war. Commercial policies are being practiced by former friendly 
Governments which would have been frowned upon by the same 
Governments before the war. If these policies are persisted in and 
the war should last one year longer I can not see any escape from 
additional neutral countries becoming involved in the conflict. The 
richest market in the world is the United States. After this wicked, 
unjustifiable war is over the millions of men now under arms will 
return to work. Their first thought will be to secure employment 
in order to obtain the simplest necessities of life. The great mass 
of the people will be compelled to work for what they can get. All 
will look to the American market and the great powers now engaged 
in war will let nothing on their part stand in the way of securing it. 
The American market belongs to America. We can dictate the terms 
upon which foreign nations can send their goods here. We can leave 
the bars down as they have been since the Democratic tariff act be- 
came operative, or we can regulate by a protective tariff the amount 
of importations and at the same time demand advantages abroad in 
exchange for concessions made. 



14 POLICIES OF PRESENT ADMINISTRATION, 

The Avar has already given birth to national and international 
boycotts, the prohibition of a long list of imports, government con- 
trol of shipping, and the arbitrary change of trade routes. Don't 
think for a moment that these and other policies of a far more serious 
character will not be enforced after the war in order to control the 
commerce of the world. Germany will emerge from the war the best 
organized industrial unit in the world. If it had not been for (ler- 
many's protective policy she could not have carried on the present 
war six months. Through that policy in time of peace (lermany 
found herself able to produce the things she required in time of war. 
She is the nearest self-supporting country of all the civilized nations 
of the world. Even Germany's enemies must admire her energy, 
capacity, and talents. P]ngland and P'rance are beginning to see the 
necessity of uniting, organizing, and mobolizing the energies of their 
people, and have taken steps to accomplish it. After the war is over 
we will be forced to meet a new industrial Europe, and I tell you we 
are not prepared to fight for our own markets much less the markets 
of the world, as against countries whose very existence depends upon 
regaining their former world markets. 

3IAXIMUM EFFICIENCY IN MANUFACTURE. 

Our foreign competitors know that, given free access to our mar- 
ket, they can curtail the output of American factories and thereby in- 
crease the cost of the American output in proportion as they de- 
crease the cost of their own product. The logical result of foreign 
underselling in our home market is to destroy our own manufacturing 
efficiency, drive the American manufacturer to the wall, and separate 
the American workman from his job. The more we lose control of 
our own market the smaller will be our manufacturing production^ 
hence the higher its unit cost. Insecure in his domestic market how 
can the American manufacturer be expected to extend his foreign 
trade 'i 

Shall we, by adhering to a policy of free trade, throw the greatest 
market in the world open to unbridled foreign competition, thereb}' 
assisting our rivals in trade to achieve the ideal 100 per cent efficiency 
resulting from full time, full capacity of their factories? Or shall we 
return to the American policy of protection to home industry by the 
adoption of duty rates which will prevent the products of foreign 
cheap labor, lower interest charges, and Government subsidization to 
be sold in the American market at rates which would put the quietus 
on American industries. 

If we fail to guard well the interests of our own citizens, the slogan 
'^'America first!" is as false as was the greeting ''Hail, Eabbi!'' 
which accompanied the kiss of betrayal. 

In concluding my remarks on the tariff question let me call your 
attention to the fact that, althou.gh the P^uropean nations are engaged 
m a battle royal, they are at the same time preparing for the greatest 
trade tug of Avar ever staged on this planet. " TKe Avorld is soon 
to see economic organization on an international scale far different 
in kind and extent from anything hitherto knoAvn," declares M. P. 
Peixotto, president of the American Chamber of Commerce in Paris. 

Great Britain has repudiated her free-trade policy in no uncertain 
terms. The school of Manchester lies in ruins and the statute of 
Cobden is buried beneath them. The dream of Chamberlain is about 
to become a reality. 



POLICIES OF PRESENT ADMINISTRATION. 15 

Germany and Austria are planning teamwork for their share of 
the world's trade, and their plans contemplate an approach to state 
socialism inasmuch as the Governments will enter into active part- 
nership with their industries. 

Japan is rapidly following the example of Germany, and nearly 
every new industry in the Far Eastern Empire is being assisted by 
Government subsidies. Thanks largely to the seamen's law Japan is 
taking over control of the Pacific trade routes. She is undertaking 
cotton, wool, hemp, and dye manufactures, and, with her wage scale 
less than one-tenth that prevailing in the United States, it behooves 
us to watch closely the industrial development of the Land of the 
Eising Sun. Alreadj^ Japan is a serious competitor in our markets 
for cotton cloths. 

A TARIFF COMMISSIOX. 

Meanwhile the bewildered and vacillating party now in control of 
our Government is doing not one thing of practical value to enable 
us to enter the lists on an3^thing like even terms with our competitors. 
The refusal of the Democratic leaders to countenance proposals for 
protective rates on dyestuffs is the most recent proof of their con- 
tinuing bigotry. And President Wilson's sudden outburst of affec- 
tion for the Tariff Commission is in such striking contrast with his 
hostility to that idea before he realized its influence as a vote getter 
and its worth as an obstacle to a revision of the tariff that it deludes 
nobody. 

I expect to live to see the day when the American people will be 
practically a unit on the subject of protection for home industries, 
as the people of Germany are to-day, and when that time arrives we 
can then talk about a nonpartisan tariff commission similar to the 
German tariff commission, to which all advocates of a nonpar- 
tisan tariff commission so universally point. Under present con- 
ditions it seems to me useless to talk of a nonpartisan tariff commis- 
sion in the United States, particularly if the commission is to be 
appointed by the President, although I am so convinced that a half- 
way fair investigation will justify the absolute necessity of tariff 
duties higher than this administration would stand for that another 
trial might be justified, but I am not in favor of it. We have tried 
nonpartisan tariff commissions in the past with great expense and no 
results. Every Congressman whose views differed from those made 
in the report repudiated the commission's findings. In my opinion 
Congress should appoint the next tariff commission, with instructions 
to confine their work to collecting facts and figures of the cost of 
production here and abroad and to submit its findings, and its find- 
ings only, to Congress for legislative action. Let the commission be 
responsible to Congress and not to the President of the United States. 
A commission so appointed Avould be more careful as to the re- 
liability of its reports submittedd than one appointed by the Presi- 
dent with a view of carrying out or demonstrating his tariff ideas. 

MONETARY LEGISLATION. 

Next in importance to tariff and revenue legislation comes legisla- 
tion relative to the monetary system. To discuss this at length would 
require more time than permissible under the circumstances, and 
therefore I shall be brief. 



16 POLICIES OF PEESENT ADMINISTRATION. 

Leaders of the Democratic Party are wont to point to the Federal 
reserve act as a great achievement of this administration, fraught 
with hirge benefits to the economic interests of this conntry. It woidd 
be impossible to go into a minute analysis of all the features of that 
act or trace the origin of each of its provisions and the changes which 
took place in the bill from the time it was introduced as an adminis- 
trative measure to the time of its final passage. SutHce it to say. 
however, and this fact is known to all of you, the basic principles of 
the Federal reserve act were worked out by what is known as the 
Aldrich Monetary Commission, and the chief merits of the act to- 
day are those which were recommended by that commission. Legis- 
lation carrjnng out the recommendations of the Aldrich Monetary 
Connnission would have pas.-ed during the administration of Presi- 
dent Taft if it had not been for the Democrats in the Senate and 
House, ably assisted in their opposition by so-called Republicans. 
Moreover, the one feature of our monetary system which has proven 
of great benefit in case of extreme need has been wdiat is known as 
the Aldrich- Vreeland emergency currency act, which was amended 
and enlarged by a section of the Federal reserve act. When the crisis 
came at the outbreak of the European war, August, 1914, it was the 
Aldrich-Vreeland Act to which recourse was had in order to avoid 
a panic. It is very commonly knoAvn and was widely remarked by 
nonpartisan authorities at the time of the final passage of the P"ed- 
eral reserve act that the chief merits of that act were such as were 
incorporated therein at the suggestion of Republican members of the 
Senate. The chief criticism that has been made of tlie operation of 
the Federal reserve act has been in its administration, which hay 
been extremely partisan, particularly in the appointment of the per- 
sonnel and in the organization of the Federal reserve bank districts. 

DESTRUCTION OF THE MERIT SYSTEM. 

For many years observers of governmental management liave been 
agreed that efliciency of the service is promoted by adoption and 
observance of the principle commonly mentioned as civil-service 
reform ; that is, the making of appointments and promotions upon 
the basis of merit demonstrated either by examination or b}- efficiency 
lecoi'd, and the retention of employees who render satisfactory service. 
This principle is observed in private enterprises and has been adopted 
in the most efficiently conducted nations. Civil-service reform is not 
]jeculiar]y a Republican doctrine. I shall not undertake to deny that 
the Republican Party has in some respects violated the principle of 
merit system. Its violations, however; were minor and of incon- 
siderable degree. In this present administration, on the other hand. 
the Democratic Party has proceeded, so far as it was i^ermitted to do. 
upon the old and abandoned theory that to the victor belongs the 
spoils, and appointments have been made in almost every branch of 
the Ciovernnient service with frequent disregard for the merit system 
and as a reward for political service or because of political friend- 
ship. This policy has been pursued not only in the various depart- 
ments of the Government at home, but, which is much more to be 
lamented, in the Diplomatic and Consular Service, through whicli 
we conduct our negotiations with foreign countries and by which we 
hope to enlarge our trade. Disregard of the merit princii:)le in 



POLICIES OF PEESENT ADMINISTRATION. 17 

Government affairs at home means merely a loss of efficiency and 
the discouragement of effort, but the disregard of this principle in 
appointments in foreign service means a loss not only financially, but 
a sacrifice of the high place we had earned in the esteem of the 
leading nations of the earth. 

I have not personally examined the record to ascertain exactly to 
what extent merit has been disregarded and political service has been 
rewarded in the Diplomatic Service, but I accept as true the state- 
ment of Dr. Charles W. Elliot, president of the National Civil Service 
Reform League, who said, in December, 1913, after this administra- 
tion had been in power nine months : 

Of the 22 ministers displaced, 13 had had several years' experience in diplo- 
matic service, while none of the new appointees had had any experience. 
Several of the appointments of obscure men to diplomatic posts have seemed to 
the public to be made in payment of political debts. 

In the public service at home the spirit of the civil-service law has 
been violated by the enactment of legislation exempting certain newly 
authorized employees from the civil-service test requirements and by 
the extraordinarily large number of Executive orders permitting ap- 
[)ointments without regard to the civil-service regulations and law. 
These are a matter of record on our statute books and in the office of 
the Civil Service Commission. 

DEMOCRATIC INEFFICIENCY ADMITTED. 

There is nothing I could say that more severely condemns the 
Democratic Party on the score of inefficiency than has been placed in 
the record by tliat party itself, for it has reversed itself upon prac- 
tically every important issue upon which it made its campaign. If 
the Democratic Party is right in the attitude which it now main- 
tains upon these issues, it was wrong, and therefore lacking in fore- 
sight, when it adopted its policies and sought to enact them into 
legislation. If it was right then it is wrong now, and in either event 
it has demonstrated a want of that high type of statesmanship which 
should be demonstrated by a party claiming the right to control the 
destinies of a nation as great as this of ours. 

The Democratic Party was placed in control of the Government on 
certain pledges, one of which was the granting of free tolls through 
the Panama Canal, which it enacted into law, but later repealed. 

The Democratic leaders assured the American people that a reduc- 
tion or removal of tariff duties would decrease the cost of living, but 
they have since made open acknowledgment that the great reduc- 
tions had no such effect. 

They accused the Republican Party of extravagance and ineffi- 
ciency and then proceeded to make the largest, appropriations in the 
history of the coimtiy, giving in return therefor a service impaired 
beyond the recollection of any man in this generation. 

They asserted their intentidh to enact legislation which would re- 
establish our merchant marine without imposing any additional cost 
upon the American taxpa37er, but the one effort they have made in 
that direction is a ship-purchase bill which does propose an increase 
in taxes for the purchase of ships, and which combines with that 
extravagance the unwise policy of government ownership. 



18 POLICIES OF PRESENT ADMINISTRATION. 

They denounced the usurpation of the powers of one branch of 
the Government hy another, but never in our history has there been 
an instance in v^^hich the Executive more thoroughly dominated the 
legislative branch than has been seen during the present Democratic 
legime. 

Other matters upon which the administration has changed its 
mind are presidential primaries, "pitiless publicity," congressional 
caucus, popular government, regulation by commission, civil-service 
reform, free sugar, woman suffrage, giving business a rest, keeping 
business out of politics, "strict accountability," relations with Mex- 
ico, single-term plank, and preparedness. The tariff commission is 
the latest, but probably not the last. 

REPUBLICAN CONSTRUCTIVE LEGISLATION. 

As I have already remarked, although Eepublican administrations 
were not perfect in their record of legislation or administration, yet 
they Avere marked by a large amount of constructive legislation — 
conservative and yetprogressive, guarding against extreme radical- 
ism but keeping abreast of the needs of the people of this country. It 
is scarcely necessary to do more than enumerate the more important 
of the acts placed upon our statute books while Republican Con- 
gresses were in control at the Capitol and a Republican Executive 
in charge at the White House. 

Republicans passed the interstate-commerce act, which guards 
shippers against excessive charges or discriminations and yet affords 
the railroads opportunities to secure an increase in rates when they 
can demonstrate the reasonableness thereof. 

A Republican Congress passed mining and other safety-device 
legislation, which has diminished the danger to laborers in hazardous 
occupations Avhere accidents are most frequent. 

The pure-food law, which not only protects the consumer against 
adulterated articles and prevents his being cheated, but also protects 
the honest manufacturers against unfair competition, was enacted 
by a Republican Congress and h^igned by a Republican President. 

The postal savings bank law was passed by a Republican Congress, 
with every vote against it in the House cast by Democrats and every 
vote for it in both Houses cast by a Republican, with the exception 
that one Democrat in the Senate supported it. 

The parcel-post act was attached to the Post Office appropriation 
bill in a Republican Senate, after the Democratic House had included 
in that measure only a temporary experimental provision which 
would have been of no value from the standpoint of service. 

Republican Congresses submitted to a vote of the States constitu- 
tional amendments for popular election of Senators and for the 
establishment of an income tax. 

The Republican Party established the Department of Labor and 
the Bureau of Mines and brought our Postal Service to a high state 
of efficiency, approved and commended by all the people of the 
country. 

The Republican Party passed the act for the construction of the 
Panama Canal, a piece of work that will be remembered by the people 
of the earth long after the pyramids of Egypt have crumbled into 
dust. The finances of the Government were such that the greater 



POLICIES OF PEESENT ADMINISTBATIOF. 19 

part of the expense was paid out of current revenues, although an 
issue of bonds had been authorized to cover the cost. 

These are only a few of the most important and best-known meas- 
ures passed by Republican Congresses. Not in any particular has the 
Eepublican Party failed to enact legislation in response to a need 
known to exist. Perhaps we were sometimes a little slow, but, if so, 
we proceeded with sureness that relieved us of the embarrassment of 
frequently repealing our acts or repudiating our promises, as this 
Democratic administration has found it necessary to do within the 
short period of two years. 

THE MEXICAN " POLICY." 

When Woodrow Wilson took the oath of office as President March 
4, 1913, he summoned " all forward-looking men " to his side. Their 
prospect must have been entrancing. By a majority of the Electoral 
College larger than any candidate had ever before received Mr. Wil- 
son and his party had come into power. The opposition was divided, 
apparently hopelessly. They took over a Treasury bursting with 
funds and supplied with a golden screen of revenue. They saw the 
country active and enterprising, though somewhat restless under the 
menace of the new administration. They received the national honor 
at a point where the respect of the world for America and American 
opinions was very high. There was but one problem that seemed of 
immediate or threatening importance. In Mexico a troublous situa- 
tion of internal politics, which had continued for more than two 
years, had recently culminated in the assassination of a constitu- 
tionally chosen executive, and our interests, personal and financial, 
in that Republic, like the interests of all other foreign nationals domi- 
ciled there, looked to the administration at Washington for protec- 
tion. This was the onlj^ cloud upon the horizon to Avliich those for- 
ward-looking men turned their eyes. 

The time has now come for a backward glance. 

We see a tiny cloud of Mexican disorder growing into a frowning 
thunderhead of multiplied revolutions, of pillage, of arson, and of 
murder, and now gathered into a whirlwind in Avhich AmerieUn 
troops may at any moment be engulfed. 

Gazing upon that tiny fleck upon an otherwise cloudless sky three 
years ago, the President declared his policy of " watchful Avaiting." 
For a year he pursued that "policy," uniil startled into action by^n 
insult to our flag, which could not have been unexpected. He 'was 
aroused from his sleep one April night in 1914 and turned uneasiW 
upon his pillow and issued the order for Fletcher to take the customs- 
house at Vera Cruz. That was an act of war and was contrary to 
the President's constitutional limitations. 

From this technical presidential embarrassment, however, Congress 
gave the President deliverance, but he was never delivered from the 
embarrassment of the attack on Vera Cruz, the fruits of which were 
the death of 19 American mar fees, over $10,000,000 expense to the 
Government, the humiliation of our compatriots in Mexico, the illegal 
collection and retention of more than $1,000,000 of customs revenues 
lielonging to the Mexican Republic, and the failure to receive the 
salute to the flag which the expedition was designed to extort. In 
the agreement reached through the appointment of the A B C medi- 
ators we became the laughing stock of the world. In it not one word 



20 POLICIES OF PRESENT ADMINISTBATION. 

is found about the hundreds of millions of dollars of American prop- 
erty destroyed, not one Avord about the hundreds of American lives 
lost, not one word about the murdering and ravishing of American 
women, and the insult to the flng was even forgotten. But we must 
give the President credit for securing the one thing uppermost in his 
mind, and that was that a certain ''greaser" named Huerta, whom 
he would not recognize, should leave Mexico. 

That expedition of service, as the President called it, with its 
farcical and humiliating termination, served only to intensify in the 
Mexican mind the contempt and hatred for the United States which 
had already found lodgment there. It bore fruit in almost continu- 
ous outrages upon Americr.n persons and property in Mexico, and 
it culminated in the villainous organized night raid upon the town 
of Columbus, as a result of which our troops are to-day treading 
Mexican soil in search of a bandit Avhom the National Government 
that Mr. Wilson refused to recognize would have destroyed long 

since. 

To the President's policy in INlexico can be traced the succession 
of humiliations which have attended us in our relations with the 
nations of Europe. At Tampico it was German and British war- 
ships, not our own, that took away the American colony from that 
place' of danger. At Vera Cruz it was an English contingent that 
took a special train to Mexico City to bring away our nationals from 
that capital, and it is not to be wondered at that Great Britain and 
Germany, when their own course found itself in opposition to ours, 
should have later recalled the humiliations which we endured in 
Mexico and should have added to them by the contemptuousness with 
which they received our communications at a later day. 

PREPAREDNESS. 

For the last 15 years I have been an advocate of a strong Navy 
and a larger and better equipped Army, and a reserve of ammuni- 
tion for Army and Navy. I voted for four battleships when Presi- 
dent Roosevelt undertook to strengthen our Navy, and I have voted 
for every amendment to a Navy appropriation bill with a view of 
increasing the amount provided for by the House of Representatives. 
I have stated many, many times in public addresses that if I am ever 
charged with voting public money extravagantly it will be for the 
building of and maintaining an adequate Navy. I have not changed 
my position on this subject, as the present administration has done 
after it was forced to do so by public opinion. In this connection 
it might be interesting to call attention to the President's message 
to Congress, delivered December 8, 1914, from which I quote the 
following : 

From the first we have had a clear ami settled policy with regard to military 
establishments. We never have had, and, while we retain our present principles 
;ind ideals, we never shall have, a large standing Army. 

Speaking of the Navy, I quote : 

But who shall tell us now what sort of a Navy to l)uild? We shall take 
leave to be strong upon the seas in the future as in the past, and there will be 
no thought of offense or of provocation in that. When will the experts tell us 
just what kind we should construct, and when will they be right for 10 years 
together, if the relative efficiency of craft of different kinds and uses continues 
to change as we have seen it change under our very eyes in these last few 
months? 



POLICIES OF PEESENT ADMINISTRATION. 21 

But I turn away from the subject. It is not new. There is no new need to 
discuss it. We shall not alter our attitude toward it because some amongst 
us are nervous and excited. * * * The question has not changed its aspects 
hecause the times are not normal. * * * l^^ there be no misconception. 
The country has been misinformed. We have not been negligent of national 
defense. 

I remember well how heartily Secretary Bryan and the Democrats 
of the Senate and House applauded the above utterances of the 
President. Somebod}^ has had his ear to the ground since the above 
was said, and it has not been Bryan, either. Compare that statement 
of the President with the one made a year later, in which he declared 
we should have the most powerful Navy in the world and that we 
did not have at present a large enough Army to successfully patrol 
the Mexican border. 

I believe that the people of this country love peace and will go 
to any honorable length to retain it; but this Government, nor any 
other self-respecting Government, can not afford to retain it at the 
expense of its honor or legitimate demands. " Peace at any price '' 
is not an American sentiment; and in these days of almost universal 
armament of the civilized countries of the world to be unprepared 
is a wicked disregard of the rights of those nearest and dearest to 
us on earth and our country's very life and existence. The day of 
universal peace and disarmament of all nations has not arrived yet. 
We all will welcome it when it comes, but in the meantime. I must 
use my influence and every power at my command to see that our 
country is prepared to defend her rights and the liberties of her 
people. As a Senator of the United States my attitude toward the 
question of preparedness is that of a trustee responsible for the 
protection of the lives and happiness and property of 100,000,000 
people; and in determining my course toward this question I must 
not speculate, gamble, or take chances with all that the people hold 
dear. In reaching my conclusions I must not forget what the his- 
tory of experience has taught other people in the world in order that 
they may be free and independent from the aggression of jealous 
and grasping nations, and that experience proclaims in every age 
of the world it can only be accomplished by being able to defend 
and protect themselves. 

The road to war is unpreparedness. Failure to be prepared to 
defend our liberties and our independence is a direct invitation to 
any half-crazed war lord or any nation jealous of our prosperity 
to pick a quarrel with us and then attack us. We must remember 
the ocean is not the barrier to-day it was 50 years ago. Personally 
I am a lover of peace, and whatever position I take as the servant 
of the American people will be to assure peace to our country for 
the future. I know that this can only be accomplished by our being- 
prepared with a competent Army and Navy to maintain our national 
honor against the demands and aggression of foreign powers who 
have not the same high ideals of life and civilization as have the 
people of the United States.^ This policy must be followed until 
such time as those powers wilf learn the lessons of true Christianity 
and their greed for more land, more power, and more slaves is entirely 
eliminated from their national lives. 

No one wishes our country to adopt militarism, and, so far as I 
can prevent it, our country never will adopt such a policy. We seek 



22 POLICIES OF PKKSEMT ADMl.X ISTliATIOX. 

lU) expansion territorially. Aggression is far from our tliouglits. 
We are a peace-loving- Nation, but we have national ideals — the 
ideals of liberty, independence, and political freedom— and for these 
ideals I am prepared to fight if it becomes necessary, and I am pre- 
pared to fight to prevent a military burglar entering our country to 
plunder and murder to his heart's content. I would rather be dead 
than a slave to a foreign power. I believe in the spirit of our Revolu- 
tionary fathers, Avho made it possible to establish the greatest Re- 
jjublic in the world. I believe in the spirit of humanity that abol- 
ished slavery from our country and reestablished and reunited the 
United States of America. 

I do not nor can I believe in the doctrine that '' if we harm no one, 
no one will harm us." The world has not yet reached that most de- 
sirable era of brotherhood of man, and we have had ample proof 
furnished by what is going on all around, that nations do not live in 
harmony. This applies to countries prepared for war and countries 
totally unprepared. Many of the great powers of the world are 
jealous of our ideals, which we most cherish. Some are growing 
jealous of our power in the world's affairs. Knowing this, I for one 
can not leave our country unprepared to defend the lives and liber- 
ties of her citizens. 

It will take years to alter the ideas of the world. The world will 
not respect our God-given rights by our ignoring them. I must do my 
duty. I can not let the question of expense stand in the way of 
placing our country in a position to maintain her integrity,' her 
honor, and her high ideals of civilization. 



